The US economy significantly slowed down in the last quarter of 2025. Gross Domestic Product grew by only 1.4% on an annualized basis, which represents a result significantly lower than market forecasts anticipating 3%. The condition of the world's largest economy was primarily impacted by the prolonged paralysis of the federal administration. Simultaneously, accelerating core PCE inflation limits the Federal Reserve's room for maneuver regarding potential interest rate cuts.

Disappointing GDP Growth

According to preliminary estimates (advance estimate), the US economy grew by 1.4% on an annualized basis in the last quarter of 2025, which is half the value of the market consensus of 3%.

Costly Government Paralysis

The prolonged federal administration shutdown subtracted about 1 percentage point from the overall GDP result, hampering government spending and investments.

Inflation Above Forecasts

The core PCE index rose by 0.4% month-on-month in December, indicating difficulties in achieving the Fed's 2% inflation target.

Poland's Trade Deficit

Poland closed 2025 with a negative trade balance of 7.7 billion euros, marking the first such case in two years.

Data from the US Department of Commerce for the fourth quarter of 2025 indicates a clear cooling of the economic climate. GDP growth of 1.4% is the weakest result since the pandemic, stemming from a record-long suspension of federal government activity. According to the Bureau of Economic Analysis (BEA), the so-called shutdown reduced the growth rate by about 1 percentage point. For the entire year 2025, the US economy grew by 2.2%, marking a slowdown compared to the 2.8% recorded a year earlier. President Donald Trump reacted to this news by blaming the Democratic Party and the Fed chief. Since 1976, there have been 21 funding gaps (government shutdowns) in the United States, but their impact on GDP is usually temporary, as halted spending is made up in subsequent quarters. The situation is complicated by inflation data. The Fed's preferred measure of price growth, the core PCE index, rose by 0.4% month-on-month in December, exceeding analysts' expectations. On an annual basis, this indicator stood at 3%, pushing back the prospect of monetary policy easing. Investors on Wall Street are reacting cautiously, and these sentiments are also affecting European markets. Despite the overall slowdown, a positive signal remains the still relatively strong private consumption and stability of business sector investments. These phenomena coincide with the publication of data from the Polish market. According to analyses by the Polish Economic Institute, Poland recorded its first foreign trade deficit in two years in 2025, amounting to 7.7 billion euros. Although exports grew by almost 4%, the growth rate of imports (over 6%) was higher, driven mainly by supplies from Asian markets. 1.4% — was the annualized GDP growth rate of the USA US GDP - Decline in Growth Rate: 2025-Q1: 2.1, 2025-Q2: 2.5, 2025-Q3: 4.4, 2025-Q4: 1.4

Mentioned People

  • Donald Trump — The US President blaming the opposition and the central bank for weak economic results.
  • Jerome Powell — Chair of the Board of Governors of the Federal Reserve System (Fed).
  • Scott Bessent — US Treasury Secretary who expressed optimism about growth in 2026.